Japan's Mitsui Fudosan Targets Europe For $6.1B Real Estate Expansion
By Roland Li | April 11, 2012 5:06 AM EST
Mitsui Fudosan, the world's largest property owner by value, plans to expand its presence in Europe by initially targeting London's strong real estate market as part of a 500 billion yen ($6.14 billion) global expansion.
The Tokyo-based company, which holds about $30 billion in assets, with an additional $20 billion in an investment fund, plans to buy development parcels in the U.K. for new development, along with existing offices and shopping centers, Hideto Yamada, head of Mitsui’s European operations, told the Financial Times.
Eventually, Mitsui plans to expand to France, Germany and Spain, but it may delay growth because of the euro zone crisis. Eventually, properties outside of Japan could account for a third of its revenue, Yamada said.
“It is something we are going to do, but we will be opportunity-driven, and we don’t have specific targets in terms of timing and total investment. It is about finding the right partners in the right places and getting the opportunities when things come up,” Yamada said.
Mitsui also plans to launch a property fund management arm in hopes of attracting investments from Japanese pension and insurance groups. The company's U.K. arm also has a 15 percent stake in British developer Stanhope PLC.
London's office market is among the world's strongest. In 2011, vacant space in London's central market fell to 16.8 million square feet, down from 15.3 million square feet in 2010 and 23 million square feet in 2009, according to commercial real estate brokerage Knight Frank. Technology firms including Apple Inc. (NYSE: AAPL), Google (Nasdaq: GOOG) and Facebook leased office space in 2011.
Prime rents in London's West End neighborhood were up 8.8 percent in 2011 to £92.50 ($146.5) per square foot, making it one of the most expensive real estate markets in the road.
“Ten years ago, the investment market was dominated by U.K. investors, with a minority of foreign money mostly from the U.S. and Germany," said Stephen Clifton, an investment partner with Knight Frank, in a February statement. "Now foreign capital from across the globe is the majority, with much of the investment coming from emerging markets and the mineral economies. Up until now the overseas money has targeted trophy assets, but I expect them to diversify their portfolios this year [by] taking on more risk, either buying sites or joint venturing with U.K. developers.
Mitsui also has holdings in the U.S. In January, it bought an 80 percent stake in the Homer Building, a 422,000-square-foot office just blocks from the White House, for $252 million.
Mitsui Fudosan was founded in 1673 by Mitsui Takatoshi, who began the company as a single retail store.
To contact the editor, e-mail:
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Australia's Low Birth Rate May Be Due to Low Confidence in Economy
- Fears Of Infection Spread Prompt Some US Hospitals To Refuse Ebola Patients
- Readers Slam a Book Showing That US Wealth And Power Rests on Slave Labour
- LG G Watch R To Be Available Globally Starting With Europe, North America And Asia Through Retail Sites And Play Store
- Young Teen Fighter Says ISIS Uses Drugs On Suicide Bombers To Get Them Perform The Act
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS